China, ECB cut rates on same day. Coincidence? Yes.

Coordinated central bank action can be a strong medicine to stabilize markets during a panic attack. Since the global financial crisis began, there have been enough synchronized moves by central banks to prove that.

So it’s not surprising to find markets wondering if there was a common thread of camaraderie, or statement of unity, running through Thursday’s rate cuts by the European Central Bank and the People’s Bank of China, as well as the Bank of England’s bolstered quantitative easing.

The ECB’s and the PBOC’s actions Thursday came within minutes of each other. (Read about the PBOC and the ECB rate cut.) Adding fuel to speculative fire is the fact that the PBOC’s unexpected rate cut came within a month of its decision to lower rates on June 7 – which, also a surprise, came just a day after the ECB decided to stay pat last month. Read more about the PBOC and ECB decisions last month.

But the timing of the moves may have nothing more in common than the intent to respond to weak or weakening economic conditions in their respective jurisdictions. In other words, Thursday’s rate cuts, while coincident, weren’t coordinated, say analysts.

“I don’t think there is a very high chance for them to act jointly… I think these coordinated efforts are confined to the developed markets,” says Frances Cheung, a strategist at Credit Agricole in Hong Kong. “But in China, they have other specific reasons.”

One reason why the PBOC decisions are independent of other central bank actions may lie in its structure. Academics and economists have often observed that monetary-policy decisions in China are influenced or made by the government and the Communist Party, unlike the West, where central banks are mostly independent.

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